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of <h1>Court Dismisses Charges Against Former Director Due to Lack of Specific Allegations, Citing Sections 138/141 of NI Act.</h1> <h3>Lav Jhingan Versus State of West Bengal and Ors</h3> The Court quashed the proceedings against the Petitioner, a former Director of M/s. Caritt Moran and Co. Pvt. Ltd., under sections 138/141 of the ... - Issues Involved:1. Liability of the Petitioner u/s 138/141 of the Negotiable Instruments Act.2. Specificity of allegations against the Petitioner in the complaint.3. Applicability of legal precedents regarding vicarious liability of Directors.Summary:1. Liability of the Petitioner u/s 138/141 of the Negotiable Instruments Act:The Petitioner, a former Director of M/s. Caritt Moran and Co. Pvt. Ltd., was implicated in proceedings u/s 138/141 of the Negotiable Instruments Act for dishonored cheques issued by the company. The Petitioner contended that he retired on 12.03.2009 and was not involved in the day-to-day affairs of the company when the cheques were issued and dishonored. The Court noted that the cheques were issued on 07.07.2008 and dishonored on 05.01.2009, during the Petitioner's tenure as Director.2. Specificity of allegations against the Petitioner in the complaint:The complaint lacked specific allegations regarding the Petitioner's individual role in the issuance of the dishonored cheques. The Court observed that the complaint did not specify who among the six Directors signed the cheques, nor did it detail the Petitioner's involvement in the company's day-to-day operations. The Court emphasized that merely being a Director does not make one liable u/s 141 of the Act, as established in S. M. S. Pharmaceuticals Ltd. -Vs.- Neeta Bhalla and Anr., 2005 (8) SCC 89, and other precedents.3. Applicability of legal precedents regarding vicarious liability of Directors:The Court referred to several precedents, including Sabitha Ramamurthy -Vs.- RBS Channabasavaradhya, 2006 (10) SCC 581, and Saroj Kumar Poddar -Vs.- State (NCT of Delhi), 2007 (3) SCC 693, which require clear statements of fact in the complaint to establish vicarious liability. The Court found that the complaints did not meet these requirements, as they lacked specific averments regarding the Petitioner's responsibility for the company's conduct.Conclusion:The Court concluded that the complaints did not disclose any fact constituting an offence u/s 138/141 of the Negotiable Instruments Act against the Petitioner. The prosecution of the Petitioner was deemed an abuse of the process of law, leading to the quashing of all four proceedings against him. The cases will proceed against the remaining accused as per law. All revisional applications and connected applications for extension of interim orders were disposed of accordingly.
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